Money from abusive parent, plus tax problems

Post date: 2021-04-14 19:29:42

My wealthy, abusive parent is trying to send me a lot of money. They told the IRS I got the money last year. I don't know what to do.

I have an abusive parent I haven't been in contact with for years. I have never regretted or had second thoughts going no-contact. They are irrational and prone to fits of rage, and not having to deal with random outbursts has made my life easier and improved my health thanks to the lack of stress. (When I moved out of my parents house I was literally able to go off prescription medication.)

Last week I received an email from a fund manager that an education fund had been cashed out in my name. They asked me for wiring instructions and told me that the IRS was told I got this money *last year* and so I need to file taxes on it right away. I think the money was supposed to be distributed to me, but it was sent to my parent using an address like "anon poster c/o parent".

I was able to confirm this is real by talking to a relative still in mutual contact. I've been automatically deleting mails from my parent for years, but apparently my parent mailed me about this last year and CC'd the relative. In the mail my parent talked about how they saved for my college costs and provided an account of the total cost of my education since grade school. This is painful, since before going to college I was told not to worry about cost, and then had the dollar cost of my school screamed at me in regular fits of rage for a long time.

I think I want to refuse the money. It is a lot of money, about as much as my annual salary a few years ago. But I have significant savings and a high paying job now, so while it is still a lot of money, I will be fine without it. I am very concerned that if I accept the money my parent will expect something or that it will provoke them somehow. On the other hand I am also concerned that refusing it will provoke them. On top of that I don't know what will happen with the IRS if I refuse the money, and I am still trying to figure that out. I think the best I can do is pay the taxes now, and if I don't take the money file an amended return for a refund next year.

My parent is very wealthy and the money won't affect their lifestyle in any way.

If I could, I would accept the money and hold it untouched for a while to see what happens. Unfortunately due to the amount involved, just accepting it will create a lot of taxes, and paying back the original amount if anything goes wrong would be costly.

As to what advice I could use... I saw other old threads about taking money from estranged relatives, but none of them involved so much money that just accepting it is complicated. I am also going to contact a tax professional anyway, but if anyone has knowledge about what to do when the IRS has been told you already have money you don't have, that would be helpful. The short timeline before the filing deadline has made this very stressful.

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